UAE central bank: request on Saudi accounts was just information-gathering

ABU DHABI (Reuters) - A request by the United Arab Emirates central bank for local banks and finance companies to provide details of the accounts of 19 Saudi Arabian citizens was just an information-gathering exercise, the central bank governor told reporters on Wednesday.

The request earlier this month followed the launch of a sweeping corruption investigation in Saudi Arabia that has involved the detention of dozens of businessmen and officials.

Asked about the request, Mubarak Rashed al-Mansouri said it was “just information-gathering, nothing more”. He did not say whether the UAE central bank was seeking information on behalf of Saudi authorities, as many commercial bankers believe.

Commercial bankers have expressed concern that the request could be a prelude to freezing the accounts.

Abdulaziz al-Ghurair, chairman of the UAE Banks Federation, an industry association, said banks had to comply with requests involving Saudi customers’ accounts if they received an instruction from the government.

“This has been standard across the world - countries have a right to look into any account. When requests come sovereign-to-sovereign, we have to comply.”

Ghurair said that even the Swiss government had given up on bank secrecy.

He also said he had not seen any movement of capital due to the Saudi anti-corruption campaign.

Some bankers have reported efforts by some wealthy Saudis to move money out of Saudi Arabia or out of the Gulf region. Actual activity appears to have been limited, however, by banks’ concern not to be involved in transactions that could turn out to be improper.

The UAE central bank governor also told reporters that the margin between U.S. dollar London interbank offered rates LIBOR= and local Emirates interbank offered rates AEIBOR= was shrinking, showing strong liquidity in the banking system, partly due to inflows into non-resident deposits.

Asked if the UAE central bank would hike interest rates if the U.S. Federal Reserve did so in December, he said: “Of course - we are linked to the dollar, we have to follow the Fed.”